Today we have published the third in our series of ‘provocation papers’, commissioned as part of the Work Foundation’s Centenary year. Authored by Dr Paul Sissons, this paper explores the challenges of increasing wage progression in the UK.

Although it was written prior to the COVID-19 crisis, the insights and analysis it offers can help us to consider the ways in which policy can not only protect the lowest paid in the months ahead, but support their wage progression in the future too.

As Sissons identifies, one of the defining features of the UK economy before the COVID-19 crisis was the prevalence of low paid and insecure employment, with 12.7% of all workers estimated to now be in poverty. A significant proportion of workers were essentially ‘stuck’ in low pay for an extended period of time, with wage levels across the economy stagnating since the financial crisis of 2008, and many workers facing significant barriers to achieving progression at work.

Early indications suggest that the COVID-19 crisis is very likely to exacerbate these issues, with data from the ONS suggesting that low earners are seven times more likely than high earners to have worked in a sector that has been shut down in recent months.

UK businesses and other organisations are currently facing mounting pressure to cut costs, and while the Government’s Job Retention Scheme has mitigated the immediate impact on the workforce to date, as that support tapers off it is very likely that workers across a range of sectors will face wage reductions or job losses in the months ahead.

All of this means a renewed focus on how to support low skilled workers back into employment, and support those who may have retained their jobs, but remain stuck on low pay, must be built in to the Government’s economic recovery strategy for the long term.

However, as Sissons makes clear, the barriers workers on low pay face to progressing in to more secure and better paid employment aren’t widely understood by employers or policymakers. Where employers have recognised the business case for investing in professional development, the reality of recovering from the COVID-19 crisis may see those organisations reduce or even abolish their skills and training budgets, as well as any careers advice provision.

Nevertheless, Sissons’ analysis suggests a number of ways in which wage progression can be achieved which could be particularly relevant in a post COVID-19 world. For example, he points to encouraging international evidence of successes around targeting specific interventions to support job entry, retention and progression that UK policymakers could draw on.

One model he explores is Work Advance, developed in New York and run across four cities in the US. Work Advance is an example of a ‘dual-customer’ model whereby the programme is seeking to simultaneously meet participant needs (for good work) and employer needs (such as addressing skills and labour shortages). Given the impacts of the COVID-19 crisis will look different from sector to sector, programmes that help match potential employees and employers based on their respective needs could support individuals to progress into new jobs in other sectors.

Crucially, Work Advance consists of a comprehensive package of support to enable this, including pre-employment training; occupational skills training (including significant vocational components where required); sector specific employment engagement and programme design; sector placement; and post-employment retention and progression services.

In addition, Sissons also suggests that prior to the COVID-19 crisis, there was scope within some sectors to develop clearer career pathways which could link training and skills provision with steps in the career ladder and serve as a route map to career development. He suggests one area where this could be particularly beneficial is around the greater integration of health and social care – and providing a clear description of the specific skill and qualification requirements needed to progress through and across the sectors (aligned with access to training provision).

More broadly, given ongoing Government support will almost certainly be required within particular sectors of the economy, even after the immediate crisis has passed, Sissons’ recommendation of embedding new approaches to worker pay and conditions, career development, and health and wellbeing into any ‘Sector Deals’ that are struck could be essential to protecting and improving working conditions among lower paid workers as we recover from the crisis.

Ultimately the scale of the likely recession to come and the level of uncertainty that remains over the prospect of an economic recovery mean we are entering an extremely challenging time for businesses and workers alike. The urgent focus is likely to be how to stem the rise of unemployment, rather than put in place measures to boost pay packets.

But by finding ways to implement the kinds of recommendations put forward by Sissons we could build a recovery that not only mitigates the damage wrought by COVID-19, but begins to tackle one of the most pernicious features of the UK economy before the crisis too.

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